Advertisers plan their spending well in advance.
Brands won't blow 12 Months of budget in the first month! They know they’ll spend more in late November and early December because consumers spend more during that time.
- For many, their fiscal year starts in January and ends in December.
- For others, the fiscal year starts in July and ends in June.
Since we know January and July both fall at the beginning of the fiscal year, we also know that they are both effectively just 1/12 of what advertisers plan on spending. They always spend less at the beginning.
There's always a little bit of wiggle room for adjusting, but overall, budgets are divided up quarterly, and then month by month from there. Holidays and seasons are accounted for, as well as things like new product launches, Amazon Prime Days, or lines of merchandise.
That lower spend is reflected in lower CPMs in early Q1 and early Q3.
Basically, because there are still 11 more months of things to spend on, spend is more conservative in month 1. That means lower CPMs and fewer impressions.
To understand why RPM reliably drops by 40-60% in January and July (sometimes more, depending on the variables of your traffic!), we first need to understand RPM.
There are two parts to RPM (Revenue per Mille)
- Revenue
- Traffic
When RPM increases or decreases for any reason, you have to dig into the specifics of both revenue and traffic.
When RPM drops in January and July, that drop is based on how much advertisers are spending, as well as how many ad impressions you are serving.
Lower revenue (because spend is lower and fewer impressions are served) is being divided by your traffic.
Additional Resources:
So now you know WHY RPM is lower, and you know that you can't personally influence how national brands are going to spend. But that doesn't mean you should just throw up your hands. There are always action items.
What can you do?
- Make sure you're utilizing Grow to the fullest! You might not be able to influence the budgets of national brands, but you CAN influence how they are spending on your site. If you have Safari or iOS traffic to your site, you already have traffic from privacy-centric browsers. Advertisers spend about 50% less when they can't serve targeted ads. Grow helps to authenticate your traffic, which means that advertisers have permission to serve targeted ads. We've seen a 142% CPM lift to traffic in privacy-centric browsers. Make your traffic more valuable.
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Send out a newsletter (or several!) sharing Top Posts (from the first 2 pages of results) that had a high CPM.
Those are articles that attracted readers that advertisers found valuable at this time last year. Use that to your advantage. Need to put this on autopilot? Set up Automailer. - Review your Top pages to see which posts have lower impressions. If impressions look low, you might need to optimize that particular page better. Here are some suggestions!
And most of all, be patient. As the month rolls on, budgets increase, which means revenue will go up, and so will RPM.